We\’ve got Polly going nuclear here:
This is it, the last veil ripped away. In the Daily Telegraph today, David Cameron penned his preview of the long-delayed white paper on public services. The paper\’s editorial saw the light: \”For the first time he explains the full scope of his ambition to roll back the boundaries of an overweening state.\” This is indeed the eureka moment for the country. Nothing like this was ever breathed before the election.
Every single public service will be put out to tender. Everything. Well, not MI5 or the judiciary – but everything else, including schools and the NHS. Forget the camouflage of localism and choice: however much local people like local services that work well, they will have no choice in the matter. A private company – or in theory a very large charity – can challenge any service they would like to run and bid to take it over. If Serco or Capita think they can turn a reasonable profit from cherry-picking anything the council or the government runs, they will have the right to demand it is put out to tender. If they bid below the current cost and claim that quality will not fall, it\’s theirs for the asking. Not the people, not their elected representatives, nor the users of those services will be able to refuse. It will be taken out of their hands because competition law will decide. If local people want their council to hold on to a much-loved service, a company can take the council to court – at huge and wasteful expense – and almost certainly win the right to tender and win the contract.
The end of the world, eh?
So, here\’s the question. Why is outsourcing such things so bad? For example, it\’s a private company in Denmark that provides the majority of fire and ambulance services:
In Denmark, Falck is currently in charge of 65 percent of munipacility fire brigades and 85 percent of ambulance services.
We can see that it can at least potentially work. Yes, Falck is a profit making company, 402 million DKK.
And no, service isn\’t bad and no, prices aren\’t higher:
The idea: private rescue services
In Denmark, while still publicly funded, most rescue services have always been provided by one private company: the Group 4 Falck, formerly the Falck Corporation. And, with the growth of outsourcing, international surveys consistently point to Falck as the model for reorganizing rescue services the world over.
Example: fire and ambulance
Established in 1906, Falck has provided firefighting and (from 1908) ambulance services for nearly a century. Originally a family business founded in Copenhagen by Sophus Falck, the group is now a limited company, with the main Danish insurance companies among its shareholders. Since its establishment, Falck has expanded into other fields, such as home care, maintenance, meter-reading for utilities, cleaning, safety, and security; and it now works internationally in Sweden (where it has worked since 1934), as well as Norway, Finland, Germany, Poland, France, Hungary, Austria, the United Kingdom, the Czech Republic, Estonia, Belgium, and even South Africa.
Even the guard services at the Danish royal palaces and government buildings are now provided by Falck. But domestic rescue services remain the group\’s dominant sector, employing 65% of its 20,000 employees, and delivered from 132 Falck stations, co-ordinated by 16 operation control centres, administering all emergency calls.
Fire-fighting in Denmark was effectively contracted out by the country\’s first Social Democratic government in 1926, when the Fire Act was passed, allowing municipalities to hire private fire-fighting companies.
More than half of the 275 municipalities today, fire-fighting is provided by Falck, the rest being provided by municipal or voluntary fire brigades. Falck\’s provision of the service is based on an agreement between Falck and Denmark\’s association of local authorities, within which Falck and individual municipalities can draw up contracts comprising fire-fighting and related services.
For decades Denmark has enjoyed one of the lowest-cost fire-fighting services in the world (three times cheaper than in the United Kingdom, measured as a proportion of GDP). At the same time, however, Denmark has the most rigorous fire legislation in Europe, covering the size of fire brigades, training, equipment, response time, and other standards, backed up by rigorous control by public authorities.
Falck provides 85 % of the ambulance services in Denmark through a similar contractual scheme. A standard agreement between Falck and the Association of County Councils lays down Falck\’s emergency service obligations, among which is the obligation to dispatch the closest available ambulance, irrespective of where it is stationed.
The payment for ambulance services is dependent on response time and activity, so that individual counties must pay more if they demand an increase in either, and if Falck fails to honour its part of the agreement they must pay a refund. The guidelines for medical training etc are developed by Falck, but approved by the national health board.
Cheaper, better, services being provided by a profit making company.
Could someone explain to me why this is a bad thing?